Myrtle Beach, South Carolina & Orlando, Florida, July 26, 2016—Highland Global Business Valuations is pleased to announce the release of its 2nd Quarter 2016 Update to its quarterly research on “Discount Statistics of Closed-End Funds.” Highland Global Business Valuations has been conducting its quarterly research on discount statistics of closed-end funds since 2005. Continue reading
Specific Company Risk Premium: A New Approach
THIS IS AN ABRIDGED VERSION OF OUR ARTICLE. THE COMPLETE ARTICLE CAN BE ACCESSED IN OUR ARCHIVES.
The business appraisal process involves a great deal of science in arriving at an indication of value, but also requires some art on the part of the appraiser. The science of business appraisals involves the approaches and methodologies used in arriving at a value conclusion. The market approach using the direct market data method requires statistics from actual transactions in the market in order to apply an appropriate multiple to the subject company’s selected earnings, revenues, or other income stream. The single period capitalization method and the multi-period discounted earnings method under the income approach require calculated inputs for the appropriate earnings. In addition, data directly observed in the market place such as the risk free rate and the equity risk premium (obtained from Ibbotson Associates) are required to build up the company’s appropriate cost of equity and discount rate. Continue reading